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Our economy relies on greed at every level

Posted: October 19, 2011 - 12:02am

“Romney Beating Obama in a Fight for Wall St. Cash.” That was the headline in a New York Times story on Sunday morning. It’s a clear sign that the political heavyweights in this country aren’t interested in the message coming out of the Occupy Wall Street protests. They’re not whining about slicing the economic pie into more equitable portions. What they want is to end the power Wall Street has to establish the policies by which we all must live.

To be certain, no one really understands the protestors’ motivations and commitment, at least not on the basis of shared experiences. Although they’ve coalesced around the theme “we are the 99 percent,” if you read their online introduction, you’d more than likely decide you don’t belong. Most of us aren’t “getting kicked out of our homes” or “forced to choose between groceries and rent.” And even though the health care system in this country is seriously broken, those in the top 1 percent wealth-wise aren’t the only people who can afford quality medical treatment.

But tacking backwards from their description of the 1 percent, most of us aren’t corporate executives of banks, mortgage companies, or the insurance industry. The question that remains then is do “we live in a society made for them, not for us,” as the protestors claim?

In a recent New York Times column, David Brooks belittled the movement as small thinkers who believe “the virtuous 99 percent of society is being cheated by the richest and greediest 1 percent.” He added that any “group that divides the world between the pure 99 percent and the evil 1 percent will have nothing to say about education reform, Medicare reform, tax reform, wage stagnation or polarization” or “the way Americans have overconsumed and overborrowed.”

Almost before his ink dried, liberal economist Dean Baker blasted Brooks. Childishly calling him “Mr. 1 Percent”, Baker explained that it was the huge housing bubble that encouraged Americans to engage in the reckless spending spree that left so many broke.

“As every graduate of an intro economics class knows, people will spend based on their housing wealth,” he wrote. “The $8 trillion bubble led people to spend vast amounts of money, exactly as economic theory predicts.”

Back in 2002 Baker warned that the collapse of the housing bubble could derail the economy for more than a decade. And he claims “people in the 1 percent who had the responsibility for managing the economy opted to do nothing” because “they were making money hand over fist off the mortgages that financed the housing bubble.” But he’s missing one of main points that Brooks is making — that greed at every level contributed to the economic collapse.

The bubble didn’t force anyone to spend beyond their means. It didn’t have to because consumer spending has long been a vital part of our economy. And any economic theory dependent on spending also encourages greed, which in turn relies heavily on borrowing. Ultimately it leaves the power to design fiscal policy into the hands of the industries holding the cash.

This is where campaign contributions come into play. Politicians need cash they don’t have in order to compete in elections. Every dollar President Barack Obama took from Wall Street businesses in 2008 left him indebted to them. It’s not their money they want back. They’re interested in policies and regulations that will boost their profit margins. And now Republican candidate Mitt Romney and others are borrowing their way into an unholy alliance that they won’t be able to escape if they move into the White House.

The Occupy Wall Street movement doesn’t feel financially cheated as Brooks would have us think. They’re fed up with the political class indebtedness to the corporate elite and the fact that there is a revolving door between the two. It’s not the wealth that differentiates them from the 99 percent; it’s the power Wall Street has to write the rules.

“It’s about changing behavior from top to bottom” Brooks concluded. Regarding greed, he’s right. But he and Baker are both wrong because they’re leaning on theories of supply and demand to understand and solve the problems. It’s time we abandon an economic system that will never put people ahead of materialistic consumption and profit.

• Moniak is a Juneau resident.

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